With temperatures in Southern California on the rise and the demand for power following suit, the California Independent System Operator declared both Tuesday and Wednesday "restricted maintenance" days for power plants in the south of its control area. Generating facilities were required to avoid any unnecessary repair or maintenance work on those days.

The Cal-ISO's forecast for peak demand was nearly met on Wednesday, as the draw-down of electricity from the grid hit 43,162 MW that day. The system manager had estimated peak load would reach 43,775 MW at midweek but would drop off considerably on Thursday, down to 40,814 MW. The downswell in the demand estimate proved accurate as a cooling trend moved into the state in the latter part of the week.

Still, the power needs of Southern California early in the week applied little pressure to the price of daytime power in the Western region. The Northern California price for spot power ranged from 61.50 mills to 68 mills/KWh in the truncated Tuesday and Wednesday trading sessions. The price sank as low as 55.75 mills/KWh for next-week deliveries. North of Path 15 nighttime power slipped a bit in value over the course of those two days. Nighttime electricity at NP15 moved for between 44.50 mills and 47 mills/KWh on Tuesday before easing down to between 40 mills and 45 mills/KWh the rest of the week.

The price of peak power at the South of Path 15 hub topped out at a high of 68 mills/KWh on Tuesday as well. By midweek the cost of daytime power at SP15 retreated to a range of 61.25 mills to 65.50 mills/KWh. Friday saw the cost withdraw even further, as trades closed for between 53 mills and 59.50 mills/KWh. Off-peak power at SP15 trailed NP15 values slightly during the first half of the week. Changing hands on Tuesday for between 42 mills and 45.50 mills/KWh, the spread downshifted to a range of 40.25 mills to 44.75 mills/KWh at the end of the week.

A swath of warmer-than-average temperatures in the Northwest has kept power values in that region close to the level typically seen in California. On Tuesday, the price for daytime power delivered to the Mid-Columbia hub ranged from 58 mills to 61.25 mills/KWh. The next day the commodity moved for between 57 mills and 60.50 mills/KWh. The drop in value at the end of the week matched Golden State prices. Peak power at Mid-C traded for between 53 mills and 55 mills/KWh on Friday. Nighttime power at Mid-C drew between 43 mills and 49.25 mills/KWh on Tuesday before reaching a high of 51.25 mills/KWh the following day. Deliveries slated for Monday attracted between 43.75 mills and 50 mills/KWh on Friday.

The absence of any significant or prolonged heat wave in the Southwest this summer has meant, for the most part, that prices in that region have been fairly indistinguishable from those in other parts of the West. This week the cost of power at the Palo Verde hub remained below the California prices by a notable amount.

Power scheduled for peak-time delivery at Palo Verde on Tuesday changed hands for between 54 mills and 58 mills/KWh. The price moved down to a low of 47.25 mills/KWh on Friday. The value of nighttime power at the Southwest hub exhibited very little volatility this week, as trades settled for between 32.50 mills and 37.50 mills/KWh
[Shauna O'Donnell].

Storage Build, Oil Slip Cause Gas Costs to Drop

The price of a barrel of oil hit a five-month low this week and the drop rubbed off on the value of natural gas on the day-ahead market. The cost of gas at producing basins in Texas and New Mexico lost as much as $0.70/MMBtu over the Wednesday through Friday period. Southern California gas deliveries brought into the state at the Topock hub dropped as much as $0.85/MMBtu during the same time period.

The build up in underground gas storage facilities across the nation reported by the Energy Information Administration also had a weakening effect on prices. The EIA reported injection of 71 Bcf last week. This additional gas brought the total amount of stored gas up to 2,976 Bcf. This is more than 300 Bcf above the figure recorded last year.

Even PG&E CityGate gas managed to trade for under $6/MMBtu this week. Opening on Tuesday at between $5.82 and $6/MMBtu, the price reached a high of $6.20/MMBtu the next day. By Friday, CityGate gas was valued at between $5.51 and $5.58/MMBtu
[S. O'D.].

Western Electricity Prices
Week's End: Sept. 5 - 8, 2006

Hub

Peak (heavy)

Off-peak (light)

Alberta Pool (C$)

24.99-999.98

22.24-435

Mid-Columbia

51-61.25

43-51.25

COB

55-65

43.25-50.50

NP 15

54.75-68

39-46

SP 15

53-68

38.50-45.50

Palo Verde

47.25-58

32.50-37.50

Archives of the Western Price Survey for the past year are also available online.

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